The Cassidy Law Firm Blog

Deciding to file for bankruptcy in Monmouth County is never an easy decision. Understanding the process a little better can help though once you have made the decision. The bankruptcy process has multiple steps and can be quite complex. Which chapter you use will determine exactly how your bankruptcy proceeds; however, there are some common steps in all bankruptcies. One of those common steps is the 341 hearing, also known as the meeting of the creditors.

Monmouth County Bankruptcy 341 Hearing

The 341 hearing is named after section 341 of the Bankruptcy Code which states that a debtor’s creditors must have an opportunity to question the debtor about debts and property. The 341 hearing is usually held at the bankruptcy trustee’s office, not at the court. The meeting is less formal than a court hearing; however, you will be placed under oath and must answer all questions asked of you truthfully.

Frequently, particularly in a chapter 7 bankruptcy, creditors do not exercise their right to attend the 341 hearing. Typical exceptions to this general rule include secured creditors, such as the lender on your mortgage loan or car loan. These creditors will often appear at the 341 hearing if you intend on keeping your home or car. If you plan to keep your home, vehicle, or other security used for the loan, you will need to enter into a reaffirmation agreement. Essentially, this is an agreement that says you plan to continue to honor the original terms of the loan and, therefore, that your car or mortgage debt will not be discharged in your bankruptcy, meaning you will keep the property and continue making payments on your loan. Though less common, sometimes credit card creditors will appear at the 341 hearing, especially if you have recently made purchases with the credit card prior to declaring bankruptcy. In this case, the creditor may ask you about what you purchased. This is basically to ensure that you did not charge lots of frivolous expenses, such as an extravagant vacation to Hawaii, and then declare bankruptcy immediately after without making a good faith attempt at repaying your debt.

In addition to potentially meeting with your creditors, the 341 hearing is also a time for the bankruptcy trustee to gather important information and documents from you. Typical documents you may be expected to bring to your 341 hearing include copies of mortgage documents, car titles, property deeds, bank statements, tax returns, and pay stubs. All individuals must also bring photo identification as well as a copy of their social security card.